A Massive Bitcoin Options Trade Just Hit the Market, Betting on a Significant Price Shift by the End of November

The $1 million trade, executed on the Deribit platform, involves a strategy known as a long straddle. The trade bets on the possibility that Bitcoin will surge above $87,000 or drop below $53,000 within the next month.

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A massive Bitcoin options trade just hit the market, betting on a significant price shift by the end of November. The $1 million trade, executed on the Deribit platform, involves a strategy known as a long straddle.

The trade bets on the possibility that Bitcoin will either surge above $87,000 or drop below $53,000 within the next month.

This trade comes during a period of low volatility, with the trader banking on a significant price move.

The whale behind the large trade chose a long straddle strategy, which reflects expectations of a significant price swing. The trader spent over $1 million on 100 contracts, buying both calls and put options for Bitcoin at the $66,000 strike price.

These options are set to expire on November 29.

Long straddle at $66K is the largest block trade of the past 24 hours in terms of premium paid! Wonderful eye @godbole17 pic.twitter.com/P79pDXAsnZ

— Amberdata (@Amberdataio) October 9, 2024

A long straddle is ideal when an investor expects the market to move significantly but isn’t sure which direction. It allows the trader to benefit from a price surge or a drop.

An author and options trader, Charles M. Cottle, said in a book, “When discussing strangle, straddles, and ratioed straddle strategies, it is necessary to understand the buying and selling of ‘premium’ [options contracts].”

According to Cottle, while premium sellers want the market to remain stagnant, buyers want it to move.

In the latest case, for the $1 million trade to be profitable, Bitcoin must either exceed $87,000 or fall below $53,000 by the time the contracts expire. If the price stays within that range, the trader will lose the premium paid, around $1 million.

According to Lin Chen, head of business development in Asia at Deribit, this trade suggests that the investor thinks the quiet market will last only a short time.

今日最大的 BTC 大宗期权：某老板购买11月底6.6万的看跌期权 看涨期权，共计100个BTC，支付权利金103.4万美金。=》做多波动率，到期时价格若87000即盈利。老板大概认为11月底随着降息周期和大选的结束，市场将迎来一波大幅波动行情。当前DVOL波动率指数达56.51，也算是做多波动率的好时机?。 pic.twitter.com/nfjeqvxCin

— Lin姐@Deribit (@LinChen91162689) October 9, 2024

The investor expects a significant shift, meaning prices could start moving more sharply in either direction.

Chen said, “The strategy depends on a sharp move beyond the $53,000-$87,000 range. If the market doesn’t move enough, the premium paid will be lost.”

U.S. Election Influence on the Market

The timing of this trade aligns with the upcoming U.S. elections, set for early November.

With the election fast approaching, traders and investors are anticipating market reactions that could drive BTC prices in either direction. This particular options trade is part of a broader trend of increased activity for Bitcoin’s November expiry options.

Chen noted that over $1.4 billion in open interest is tied to Bitcoin’s November contracts, with “a put-call ratio of 0.66.” This ratio indicates more traders are hedging their bets, preparing for a possible market shift after the election results are announced.

“We are seeing more hedging around this time as traders prepare for potential post-election volatility,” Chen noted

This whale trade reflects growing interest in Bitcoin’s price potential as the election approaches. Traders like the one behind this $1 million bet are preparing for a significant market shift, either up or down.

If Bitcoin’s price moves beyond the $53,000-$87,000 range by the end of November, this trade could result in substantial profits.

BTC trades at around $60,807, having declined 2% over the past 24 hours. Notably, the current price represents a critical support level for BTC.

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